AFCE contract news: D'Bust signs D'extension

[MoLewisrocks]

Given the 30% rule how can his 2011 salary remained at $10 million.

the 30% base for Ferguson is $6 million. 30% of $6 million is $1.8 million.

2009 $6 million
2010 $6 million plus $1.8 million = $7.8 million
2011 $7.8 plus $1.8 million = $9.6 million max.

Back to the actual thread topic before pissing matches with trolls overtook it, it appears that this was an extension however it modified his prior salaries from the existing deal because they couldn't remain the same in an extension in violation of the 30% rule. He also got an option bonus, so I guess contrary to Albert Breer's contention, you CAN use those and spread amortization in extensions too...as long as his "salary" including the pro rated option bonus for 30% purposes is in line with where it has to be, and apparently it is at less than $7.8M this year and just under $9.6M in 2011. Again, I think the mistake some people make in reading/or hearing these rules is in taking them literally to infer that you can't do something when in fact you can...provided doing so doesn't violate the 30% rule...

And there may be another limitation afoot regarding guaranteed money in extensions.

Teams in general don’t like to load a lot of money into the signing bonus, and with the possibility of no football in 2011, this approach is one way to keep spending down in this final league year.

There might be more to it. There is a rule in the CBA that seems to limit the amount of fully guaranteed money teams close to or at the 2009 salary cap can dole out in renegotiations or extensions this year. In other words, teams need to have cap room left at the end of 2009 to absorb any reallocations of fully guaranteed money, or else face a penalty. The NFL Players Association primer on negotiating in the uncapped year explains this applies to renegotiations or extensions of existing 2009 contracts, but not “new” contracts negotiated in 2010.

More on the D'Brickashaw Ferguson deal, and the Jets' big picture | NJ.com

Looking at his cap projections through 2017 on nyjetscap.com it would appear that if he can get to 2011 on the roster his dead cap vs. cap savings if cut would implicitly guarantee he remains through 2012 or 2013. The wording of his option bonus might be significant in it is due at the start of the next league year...possibly precluding any need for action if there isn't one due to lockout...or extending their timeframe to make that decision until there is a season to the played with likely a new CBA in place. In the last 4 years (2014-2017) they can walk away from him if the deal plays out as is with little dead cap and substantial cap savings.

It would appear that Ferguson and his agent decided to roll the dice on the best offer on the table netting another $2M vs. standing pat and possibly not ever seeing the $10M or more (franchise tag amount for OL) in 2011 if there were a lockout or if he underperforms expectations this season. I'm sure their hope is that if he performs well enough for the JETS to maintain him on the roster a new CBA will thereafter facilitate restructure that will ease the JETS immediate cap concerns and in the process get more of his money fully guaranteed via conversion. The deal seems to be a gamble/calculated risk for both sides, the player this season and moreso the team in 2011-2013.

 

[Miguel]

INSIDE THE CAP with J.I. Halsell: D'Brickashaw Ferguson: The Navigation of Yet Another Challenging Rule of the Uncapped Year

provides even more information.

 

[Miguel]

INSIDE THE CAP with J.I. Halsell: D'Brickashaw Ferguson: The Navigation of Yet Another Challenging Rule of the Uncapped Year

provides even more information.

FWIW - Brady's 2009 salary was not fully guaranteed.

 

[MoLewisrocks]

INSIDE THE CAP with J.I. Halsell: D'Brickashaw Ferguson: The Navigation of Yet Another Challenging Rule of the Uncapped Year

provides even more information.

Excellent explanation, although his interpretation of what guaranteed means is considerably broader than even the old implicit guarantee...because he presumes they simply will not cut him before 2011 (and I wouldn't trust Tannenbaum in that situation given his track record). If he gets to 2/15/11 and isn't cut he is guaranteed $20M between 2010 and the next two seasons...again, for skill only. If he gets to 2012, he's guaranteed roughly $28M or possibly $32M if his option is exercised, for skill only. His first four seasons averge $7-8M potentially implicitly guaranteed provided he's not injured and still on the roster after the first two seasons...

It would be interesting to know what the insurance premiums would total on that level of injury guarantees covering that span of time.

 

[MoLewisrocks]

Excellent explanation, although his interpretation of what guaranteed means is considerably broader than even the old implicit guarantee...because he presumes they simply will not cut him before 2011 (and I wouldn't trust Tannenbaum in that situation given his track record). If he gets to 2/15/11 and isn't cut he is guaranteed $20M between 2010 and the next two seasons...again, for skill only. If he gets to 2012, he's guaranteed roughly $28M or possibly $32M if his option is exercised, for skill only. His first four seasons averge $7-8M potentially implicitly guaranteed provided he's not injured and still on the roster after the first two seasons...

It would be interesting to know what the insurance premiums would total on that level of injury guarantees covering that span of time.

A poster over on the Planet posted this information concerning the topic of players insuring contracts that was discussed on Sirius the other day...

They were talking on Sirius NFL Radio last week about insurance and how ungodly expensive it is, making it almost prohibitive. If I remember correctly, Tim Ryan was talking about a policy worth $400K costing about $60K for one season. Pat Kiran chimed in that not only that, but before you can get paid on a claim, the insurance companies grill you on whether it was truly career ending. Just because you retire doesn't meet the standard. For example, the insurance company could come back and say, well so and so came back from an ACL MCL at your age. They could argue you chose to retire and it just coincided with an injury you sustained.

I knew the idea of "just insure it" was naive. Not only are premiums prohibitive, but there are limitations and conditions and exclusions (remember when Red sox ownership couldn't insure a four year deal to retain a certain HOF pitcher with rotator cuff history...) not to mention endless hoops to clear if you ever hope to even partially collect on a claim.

If the premiums are somewhere in the 10-15% range, Ferguson would have to pay $3-5M per season to insure himself for $30M in guaranteed future income. His raise this season upped his total compensation to $5M. So Breer's no big deal commentary on the player essentially guaranteeing his own money via insurance is in fact a big deal... It could end up costing him tens of millions over the next couple of seasons to incrementally keep his guaranteed money guaranteed against injury, which being the case exponentially lowers the actual total value of his extension.